So my impression is largely a bay area/silicon valley impression, every time I try to work elsewhere, people start asking for degrees, which I don't have, and they also mention that they pay dramatically less. Or, at least, that is my experience, with the jobs I have been offered.

My perception is that salaries for direct-hire software engineers at top-tier companies have gone way up in the last ten years or so. My impression is that contractor wages are... keeping up with inflation.

Also note, my perception is that contractor interviews have not gotten much more difficult at all, while direct hire interviews have practically become contests of endurance; like you are expected to spend like 5x as much time on a direct hire interview than, say, 10 or 15 years ago, while you can do a contract interview over a long lunch.

Companies also seem to be okay paying Engineers very significant sales-style performance bonuses (in fact, this is where almost all of that increase in pay has come from) and this really helps them keep the gamblers; the people like me who jump every few years 'cause someone offered 20% more. (I mean, the bonus system is another system you need to learn to game, but it's not harder than the interview system.)

My speculation (and I'm totally unqualified to speculate on sociological trends, but you asked.) is that something has changed, and the cultural prestige of the Engineer has gone way up, and that this has changed management's willingness to spend directly on Engineer compensation.